Evaluation of Walmart's Corporate and Business Strategy in Oman

This report provides an in-depth analysis of Walmart's corporate and business strategies within the Omani market. It employs frameworks such as PESTLE, Porter's Five Forces, and SWOT to evaluate Walmart's business performance and competitive positioning. The report identifies and assesses the corporate and business strategies Walmart has implemented to gain an advantage over its rivals, focusing on differentiation efforts specific to the Omani market. Furthermore, the study offers strategic recommendations based on the analysis, aiming to provide actionable insights and a well-supported conclusion. The report also considers Walmart's resource-based view, emphasizing the company's investments in employee training and its efficient cross-docking inventory system.

CORPORATE AND BUSINESS STRATEGY

Executive Summary
The report would evaluate the business performance through the frameworks like PESTLE,
Porter's Five Forces and SWOT. It would also consider the corporate and business strategies
Walmart has followed in this market to gain competency over its rivals. Moreover, the
differentiation efforts of the brand in the chosen market would also be further determined herein.
Based on the above analysis, suitable recommended strategies would be discussed which would
help the report to derive an authentic conclusion.
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Table of Contents
1.0 Introduction................................................................................................................................4
2.0 Company and industrial analysis...............................................................................................6
2.1 PESTLE analysis...................................................................................................................6
2.2 Porter’s Five Forces...............................................................................................................9
2.3 Resource based view............................................................................................................11
2.4 SWOT analysis....................................................................................................................11
3.0 Identification of possible corporate strategies.........................................................................14
4.0 Identification of possible business strategies...........................................................................16
5.0 Selection and evaluation of strategies......................................................................................17
5.1 Evaluation of the corporate strategies..................................................................................17
5.2 Evaluation of business strategies.........................................................................................18
6.0 Recommendations....................................................................................................................20
7.0 Conclusion...............................................................................................................................21
References:....................................................................................................................................22
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1.0 Introduction
Effective business strategy always allows a brand to establish a clear comprehension of its
individual organization. In the statement of Argenti (2018), it can be noted that suitable corporate
and business strategy tends to facility management to focus on the exact criteria that business
requires in delivering the best performance, productivity and profit in the upcoming future. In a
similar context, Peng (2017) asserted that a perfect business policy could guarantee that
organizational resources have been used professionally. The instances of organizational
resources involve reputation in the marketplace, customer base, personnel, company patents, and
production processes and logistics workforces including the ones operating in the warehouses
and shipping partners. It is significant for management to establish effective business policies
that can use each of its business resources to gain a perfective competitive advantage over its
rivals (Rugman and Verbeke, 2017). Additionally, the perfect business strategy also benefits
develop new products that uphold and enhance companies’ market share in the sector and offer
the owner with a proprietary control over progressed technology in the chosen sector. The
incompetent usage of business resources can cost an organization unwanted expense, lose its
potential customers base and condense market share.
Wal-Mart Inc. is a multinational retail corporation headquartered in the USA. The brand has
been established in the year 1962 by Sam Walton. The brand is considered one of the most
leading retail giants in the global economy. It has also expanded its operational reach in the
Oman country as well. The present report aims to determine that Wal-Mart’s business and
corporate strategies in the market of Oman. The report would evaluate the business performance
through the frameworks like PESTLE, Porter’s Five Forces and SWOT. It would also consider
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the corporate and business strategies Walmart has followed in this market to gain competency
over its rivals. Moreover, the differentiation efforts of the brand in the chosen market would also
be further determined herein. Based on the above analysis, suitable recommended strategies
would be discussed which would help the report to derive an authentic conclusion.
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2.0 Company and industrial analysis
2.1 PESTLE analysis
Political
The political scenario in Oman is relatively positive for the industrial set up. It has been
identified that the governing authorities of Oman has joined with several international firms
involving World Trade Organizations, Free Trade Agreement, etc with the US and has initiated
amendments in the legal structure of the nation to meet certain requirements of globalization in
the world economy (Times of Oman., 2018). This approach has been effectively beneficial for
Wal-Mart and also other international retail firms to penetrate into this nation and run successful
operation by identifying the market trends. The political scenario is also quite open to the context
of diversification, hence, it allows every domestic and international brand to diversify their
business process by abiding the ethical standards (Times of Oman., 2018).
Economic
In the opinion of Fontana et al. (2017), the economy of Oman is considered as one of the highest
income economies in the entire Middle East province. It has been determined that the
international economy pertains to rise despite the unavoidable uncertainties in the US and also in
Europe and markets. However, Oman is far well forward to the rising global economies in terms
of its growth and also the average worldwide growth rate. This has been absolutely attributable
to the sturdy economic strategies of Oman (Epstein, 2018). This is also creative adequate space
for the business including Wal-Mart to expand their operational reach in the market with almost
low-risk estimations.
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Social
It has been determined that the market of Oman is showing high acceptance towards the modern
trade operations. In the consideration of Cramer (2017), the market of Oman is developing and
growing at a rapid pace, therefore, the customers are getting more inclined towards the retail
products and getting dependent on its service offerings. Therefore, the positive attitude of
Oman's customers is creating more space and opportunities from Wal-Mart and other retail
brands to set up its successful operation in the specific market (Galpin, 2018). It has been
recognized that more than 6.2 million sq.m. retail facilities are estimated to capture relative
spaces in the Gulf Cooperation Council (GCC) within the next five years down the line. The
market of Oman has also witnessed a steady economic growth, which increases from 1.1% to
2.9% in 2017 (Times of Oman., 2018). Therefore, the social circumstance of the particular
market has been highly beneficial for Wal-Mart to maintain its strong profitability.
Technological
It has been already discussed in the above section that the economic condition of the region is
quite stable, which help the industrial sector to get adequate technical and equipment related
support to maintain a successful operation of their businesses (Grayson and Hodges, 2017). The
stable economic state also benefited the retail sector to include the advanced technical measures
into their internal system to maintain a speedy, efficient and effortless operation. Hence, Wal-
Mart has also included the required and advanced technology that has helped the brand to
improve its process flow and tackle a large customer base with smart initiatives. In this context,
it may be noted that the technological development in the country has been substantial and the
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company has also been one of the pioneers in adopting technology in large scale in its
operations.
Legal
Information gathered highlights the fact that the Labor Law regulations in Oman have been
issued by His Majesty's Decree of No 35/2003 (Oman.om., 2018). It has been applied to every
Omani or emigrant employees and employers, private and public developments, businesses and
their subsidiaries that tend to practice their professional functions in the Sultanate of Oman.
Every organization including Wal-Mart is supposed to abide this legal terms of the government.
Environmental
The organizations operating in the current market are strictly instructed to conserve the
environmental components to maintain a perfect ecological balance (Sustainableoman.com,
2018). The brands including Wal-Mart in the Oman market are instructed not to create much air
and water pollution through excessive wastage of perishable products. There have been
restrictions imposed by the Oman Government on water, air and noise pollution and Wall-Mart,
being a retail giant, has to abide by those regulations strictly as far as its physical stores' related
operations are concerned.
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2.2 Porter’s Five Forces
Bargaining powers of suppliers
The bargaining powers of suppliers in Oman’s retail sector are moderate. According to Pucheta‐
Martínez and Bel‐Oms (2018), the number of suppliers in this specific segment is greater in
numbers, therefore, the brand is having available options to switch their suppliers in case of any
discrepancy. Hence, the suppliers are facing through time in terms of maintaining a healthy and
decent professional relationship with the brands in order to retain them (Nikolaev et al. 2018).
Moreover, the profit and production of Wal-Mart are on the higher margin, therefore, the
majority of the suppliers in this market would prefer merging up with Wal-Mart.
Bargaining powers of customers
The bargaining powers of customers in this segment and market are relatively on the higher
margin. As per Dodgson (2018), the market is getting saturation with wider numbers of retail
players offering the product at high discounted margins. Therefore, the customers in the Oman
market are getting wider choices in terms of purchasing a similar range of products with perfect
negotiation skill s by comparing the price ranges offered by each brand (Grayson and Hodges,
2017). Hence, Wal-Mart despite being the leader in the market has to be strategically in terms of
setting the price range of its products by keeping in mind the rivals’ position.
Threats of substitutions
The threats of substitute in this market are also high. Davidsson (2015) denoted the fact that the
market is already getting saturated with wider numbers of retailers. Therefore, every brand is
found under the trend of price and product war. Since the customer range is considerably high
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herein and so as their switchover ratio. Thus, the retail brands are found in the war of converting
each other's potential customers’ base with related products. Hence, Wal-Mart is also threatened
by the high degree o substitutes in this market, where the customers are always seeking products
offered at much-discounted rates.
Threats of new entry
The market is moderate in terms of new entrants. Since the economic condition of the market
and the political circumstances are quite lucrative and supportive for industrial growth, therefore,
the new brands have high scope to form a successful business set up in Oman (Fitz-Koch et al.
2018). On the other hand, the degree of rivalry is quite high, which is a somewhat imposing high
threat towards the new brands (Ramoglou and Tsang, 2016). Nevertheless, in case a new startup
enters the market with much unique and lucrative product, service and pricing strategy, it can
effortlessly break the entry barriers.
Competitive rivalry
Based on the previous discussion, it may be conceived that the market is competitive enough for
the business houses. There is a number of competitors vying for the greater market position with
larger market share. In the consideration of Welford (2018), it has been identified that the market
of Oman is establishing a growing with the passage of time, which is somewhat encouraging
both the domestic as well as international brand to initiate a business set up in the specific
market. The retail section in this region is quite developed with some of the best leading giants,
including Wal-Mart, Zara, H&M, etc. Hence, the degree of competitive rivalry in this sector is
relatively found on the higher side. However, Wal-Mart has managed to gain a leading position
in the market with its lucrative and profitable discounted offerings over its competitors.
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2.3 Resource based view
Information gathered highlights that Wal-Mart has managed to employ 2.2 million resources
cross wide the world (Company Facts., 2018). Approximately 75% of its store management
teams have joined the organization as hourly associates and they are earning a salary between $
50,000 and $ 170,000 per year. Moreover, the brand has been investing $2.7 billion over a period
of two years in education, training, and wage enhancement schedules (Company Facts., 2018).
It has been identified that in Wal-Mart, the stores operate following "Everyday low price"
philosophy. The brand has managed to emerge as the industry leader for being efficient with its
cost management strategies, which relatively allowed the management to pass the savings to its
customers and offer product lines with higher margins of discounts. In the statement of Peng
(2017), the brand has also heavily invested in its unique cross-docking inventory system. The
cross-docking system has facilitated the organization to attain economies of scale, which
automatically limited its sales costs. With the support of this specific system, the products of the
brand are continuously delivered to its store layouts with the span of 48 hours even without
having inventoried them (Suddaby et al. 2015). The lower price margins also the brand to
eliminate the expense of its sales promotion and thus, the sales estimations were much
predictable for Wal-Mart. The cross-docking system has helped the managers as well as
resources within the organization to gain more control at the store level.
2.4 SWOT analysis
Strength
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The brand has a foundation capability including its use of information technology to sustain
its worldwide logistics process (Shane and Nicolaou, 2015). For instance, the management of the
brand can very well watch and maintain a thorough record of how its products lines are
performing internationally. The management can judge the potential of its every product lines by
having a store-by-store glance. In the opinion of Shepherd and Zacharakis (2018), it can be
stated that a focused strategy has been placed by the brand in Oman market to conduct a proper
human resource management and progress. Saebi et al. (2018) denoted that people had been the
key to Wal-Mart’s business and hence, the brand tends to invest both its time and capital in
training employees and developing and retaining them. With the passage of time, Wal-Mart in
Oman has grown considerably and has practiced global development.
Weakness
Since, the organization focused on selling diversified products across different sectors (for
example food, clothing or stationary), it might not gain the suppleness of few of its additional
alert rivals. According to Olson et al. (2018), Wal-Mart is facing stiff competition in both Oman
and other nations in the Middle East with its stores like Kmart and Target. Numerous minor
retailers, chiefly dollar outlets, for example, Dollar General and Family Dollar, had enabled to
discover an undersized niche segment and contend productively in opposition to Wal-Mart for
the domestic consumer sales. Wheelen et al. (2017) claimed that Wal-Mart has been identified as
the globe’s principal grocery vendor and organize its empire, regardless of its IT recompenses,
the brand could be vulnerable and exposed in certain operational areas as a result of its enormous
span of control.
Opportunity
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